DeFi Development Corp. Common Stock 2026 Q2 Earnings Call

Good morning. Welcome to DeFi Development Corp's second quarter 2026 earnings update call. I am Dan Kang, Chief Strategy Officer and Head of Investor Relations. Joining me today are Joseph Onorati, CEO, John Han, CFO, and Pete Humiston, CMO. Yesterday, August 12, after market close, we issued a shareholder letter with our financial results and commentary for our second quarter of 2026. These items are also posted on our investor relations section of our website. Before we begin, I would like to remind everyone that we will be making forward-looking statements during this call that involve a number of risks and uncertainties. Actual results may differ materially due to risks and uncertainties, which are outlined in our filings with the SEC, including our Form 10-K and Form 10-Q. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors.

These factors are described under forward-looking statements in our shareholder letter and in our most recent filings with the SEC. That being said, we urge you to consider these factors and remind you that we undertake no obligation to update the information contained in this call to reflect subsequent events or circumstances. You should be aware that these statements should be considered estimates only and are not a guarantee of future performance. With that, let's kick off. Joseph, John, thank you for joining us. Pete, welcome to your first earnings call. For those who haven't met Pete, he's not only our CMO but leads all of our Solana-specific research initiatives. He's helped spearhead a number of reports that have gotten really good traction among our investor base, and excited that investors finally get to put a face to the man who puts out all of our killer content.

Welcome. All right. With that, let's get going on Q&A. First question, let's start with the key framing of the letter. You started this letter around the concept of structure over path. Unpack that for us a bit. What does this actually mean in practice, and why should an investor care about structure more than other things like MNAV?

That's a great question. Let's unpack it a bit. Back in April of 2025, when we kicked off the Solana Treasury, we were the first and only non-Bitcoin digital asset treasury in the U.S. Of course, we were really inspired by Michael Saylor and strategy. But we understood back then, and even now, that we have to innovate and build on the foundation that they set. For us, that included owning and operating our own validator infrastructure and deploying our treasury on chain, and also finding other ways to enhance yield in a risk-adjusted way. Of course, if we're anchoring to a strategy, then the investor education is kind of automatically geared toward MNAV and understanding how digital asset treasuries are valued relative to each other. But at the end of the day, that's not something that we really control.

So part of what we tried to do this quarter was to clearly identify the things that we control and really focus on those areas. Things that we control include cost to operate our business, the amount of stock that the founding team and management holds, so it is over 20% of the company, and the fact that we own the super voting preferred shares, which shield us from activist takeover. But maybe most importantly, we control our leverage levels. And leverage is, in particular, something we are proud of here. It allows us to be amplified expression of Solana. For instance, if you wanted leveraged or enhanced exposure to Solana, the alternatives, pretty well all of the alternatives, have more risk and a higher cost. So a core feature of our business is that we have $125 million of convertible debt.

The earliest maturity on that debt is April of 2030, and this debt is designed to withstand a prolonged period of weakness in the crypto market. It is designed to not be margin called. Solana could drop 90% tomorrow, and that convertible debt wouldn't come due. We want to make the story for DFDV for investors as simple as possible. You have heard us use the mantra SOL on steroids. The idea is that leverage and the ability to grow SOL per share enable us to have a natural boost to SOL the underlying. SOL itself is down considerably year to date, which doesn't feel great, but we are confident that in a year from now, things will look very different. And with DFDV's leveraged exposure, DFDV passes on that leveraged upside to shareholders.

Thanks, Joseph. Next question: When will the next major purchase of SOL be? I will take that. It will be super quick. As soon as we can make it happen. Obviously dying to buy SOL here, but capital markets in general have not been great. I think this is largely a function of investor attention being diverted from crypto, as we outlined in our shareholder letter. So, nothing to share on this front at this point in time, but stay tuned. All right. Number 3. A key pillar of the story is your convertible debt. The letter also describes retiring convertible debt and leverage levels that are well above 100%, meaning your debt exceeds the market value of your treasury. Walk us through how you are simultaneously levering up and paying down, and what happens to that ratio if SOL falls another 30%. John, you want to take that?

When the market price of the debt is attractive, we de-lever to re-lever later. We have disclosed in our shareholder letter that we have retired a portion of our convertible debt at pretty attractive discounts to par. Even though our July 2030 note isn't due for another four years, the fact that we are retiring some of the debt at these pretty attractive levels simplifies our cap structure and moves us towards the ideal end state, which is a capital stack composed mostly of preferred equity in the long term. The strategy is pretty simple. We run highly levered in bear markets and aim to equitize that leverage in bull markets. That said, we are not de-levering currently for its own sake.

When the market offers us the chance to clean up the stack at a discount so we can re-lever later on better terms, we'll take that trade every time.

Thank you. Thanks, John. The next question, you've pulled June 2027 guidance, but you're keeping the one SOL per share target for December 2028.

Can you talk about this decision a bit further? John, another one for you.

Yeah. Basically, the way to think about this is that we manage DFDV for long-term Solana per share growth, which is not purely a point-in-time estimate. Last summer, we were pretty aggressive on our guidance for current June 2026. Our growth came in really different bursts. Really rapid growth in early 2025, followed by a slower growth in the back half of the year. That's basically the nature of how DApps grow and a function of crypto markets and TradFi capital markets. It depends on the opportunity, depends on how these markets are trending at any given point. We're still confident on the trajectory of the business, but we didn't want to get sucked into a false sense of precision. Over a multiyear horizon, we think the cycle noise washes out and the structural drivers do the work.

Investors can already see the organic floor from our staking yields and DeFi activities, and that compounds regardless of where Solana trades. The question is how much inorganic growth we layer on top through capital markets activities. One could, depending on how you do the calculation, preferred equity issuances alone, depending on each individual person's and investor's assumptions, could drive Solana per share growth well in excess of our trailing 12-month growth rate. Net-net, we have multiple paths and opportunistic levers to pull to eventually reaching one Solana per share.

Thank you. Thanks, John. Helpful.